UPDATE 3-Generic drugmaker Mylan offers $29 bln for Perrigo

Wed Apr 8, 2015 4:59pm EDT
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(Adds healthcare merger activity, Perrigo confirms offer, analyst comment)

By Bill Berkrot

April 8 (Reuters) - Generic drugmaker Mylan NV has offered to buy Perrigo Co Plc for about $29 billion in cash and stock, a deal that would make Mylan a major player in over-the-counter consumer products and extend its geographic reach.

Mylan's disclosure on Wednesday set off fresh speculation in an already hot market for healthcare deals. Some industry watchers questioned whether Mylan sought to fend off unwanted takeover advances from larger rival Israel-based Teva Pharmaceutical Industries. Others said the offer could spur competing bids for Perrigo.

Mylan offered to buy the Ireland-based company for $205 per share. That represents more than a 25 percent premium over Perrigo's April 3 closing price, the last trading day before Mylan made its offer in an April 6 letter to Perrigo Chief Executive Joseph Papa.

Perrigo shares initially jumped well above the offer price to $215.72, but closed up 18.4 percent at $195, indicating some investor skepticism that the deal will happen. Mylan shares rose 15 percent to $68.36, while Teva's U.S.-listed shares gained 3.5 percent.

"People think that this is going to flush out a Teva bid for Mylan," said Stifel Nicolaus analyst Annabel Samimy. "If that's the case, then this bid for Perrigo is not going to go through."

She noted that Mylan provided very few details of the offer, including how much would be cash and how much in stock.

Mylan Executive Chairman Robert Coury said the two companies have held several discussions about a proposed merger. Perrigo confirmed that it had received an unsolicited offer from Mylan and said its board would meet to discuss the proposal.   Continued...